Case study: NDAs for matrimonial purposes

A forensic accounting case study

In the past year we have seen an increase in the number of NDAs (non-disclosure  greements) we are being asked to sign before being provided with information to prepare a valuation report for matrimonial purposes.

When we say an increase, this is relative, and NDAs are required in only a fraction of the number of engagements we undertake each year. However, there does seem to be an increasing trend here.

We would argue that an NDA is largely surplus to requirements. After all, our work is covered by a duty of confidentiality to the court and it goes without saying that, as professionals, we are not going to go around sharing details of the companies we are valuing (or providing other advice in relation to).

That said, we appreciate that business owners are protective of their commercially sensitive information. Thus, when asked, we will always sign an NDA – depending on the terms.

Where an NDA is required, this can have a more significant impact on an engagement than might be expected. For a start it usually takes time to negotiate the terms of the agreement such that all parties are happy. Negotiation time delays the preparation of the report. Further, time is money and a lengthy back and forth can result in additional costs.

NDAs are provided by the company / client and, in our experience, we are usually provided with a standard NDA that isn’t designed to cover the role undertaken by a single joint expert. We usually have to propose at least a few changes.

NDAs for matrimonial

Common areas where changes are required include:

  • Retention of information
    We need to keep records for a sufficient period to enable us to meet our obligations to the Court
  • Access to information
    Kate is assisted by the team and therefore the wider team must be allowed access to the information
  • Provision of information to solicitors / the other party
    Except in exceptional circumstances, both sets of solicitors will need access to any information relied upon by the expert accountant to ensure transparency and enable them to scrutinise the report

This latter point is usually the most contentious issue where only one party is involved in the business or the individual is a minority shareholder.

In summary, when acting in a matter where the parties require an NDA it is important that they consider if it is really necessary and are aware of the impact of their request, especially when working to a Court deadline.

This article was originally published in Forensis Autumn 2020.

For more information

For more information on NDAs for matrimonial purposes, please contact either:
Kate Hart or Jessie King, or call us on:

01483 416232